The rumors surfaced last week, and AT&T made it official yesterday evening. The telecom company has agreed to pay nearly $50 billion in cash and stock for satellite TV provider DirecTV. If approved by regulators, the new AT&T would have control of about 26 million TV subscribers.

AT&T already has a small cable TV footprint with its U-verse service, but bundling DirecTV with its other products would be very "synergistic," as they say. AT&T must really want this – it's also picking up $19 billion in debt with the acquisition. Satellite companies haven't had a lot of luck in recent years as people cut back on TV and stream more internet video. With DirecTV, AT&T could cut its small U-verse cable TV footprint and transition everyone to satellite TV, giving it more capacity for broadband. It says broadband could be rolled out to as many as 15 million additional homes if the deal goes through.

As the companies seek to convince regulators to approve the deal, they will no doubt point to the possible merger of Comcast and Time Warner. They will likely argue a larger AT&T could offer more competition to Comcast. AT&T has also gone out of its way to promise that it will stick to the FCC's now-defunct 2010 net neutrality rules for three years after the deal closes. Yeah... thanks for that. Three whole years of net neutrality. At any rate, the companies will be holding a press conference this morning to talk about the deal. There might be more info then.

Comments

oh my god, why do they always pay so much? if they have that much leftover money then they could raher eliminate hunger on this worls (and probably 3 times over)

Matt

I think the argument doesn't have to do with hunger necessarily. That's not really AT&T's business model, so it doesn't make sense for them to tackle that. The Bill & Melinda Gates Foundation is trying to save lives with $37 billion in assets and none of those issues have been solved, so a $50 billion infusion won't somehow make everything hunky-dory.

The issue is, how can AT&T have $50 billion to purchase another corporation but then tell Congress and their customers that they can't afford to finish their network expansions on time?

They've essentially abandoned rural areas and haven't stuck to a single deadline in terms of laying fiber or getting X MB/s on average to homes; on most of those deadlines, they're 5-6 years late already. They've been government-subsidized specifically because of those broken promises, use lack of capital as their main excuse for why it hasn't finished already, and then dish out $50 billion to decrease competition. They then argue that net neutrality legislation would do too much harm to their bottom line and lead to every business's favorite buzzword to avoid competition, "job loss." *That's* the problem.

My1

I wasnt pointing this exactly to hunger of the world, rather just saying how they can spend that much money.
but for real? 50.000.000.000 Dollars is rather much money.
remember, FB vs WhatsApp was 19 million...

anon_coward

interest rates are low and they can borrow cheap to pay for this
they have some financial model that says they can get nice returns from selling sunday ticket to their customers as well as selling internet access to direct tv customers

Guest

Remember when T-mobile almost bought AT&T? Yeah, seems like those times are over.

ltredbeard

No, but I remember when AT&T tried to by T-Mo. (hint you have it backwards)

Bob G

DO IT DO IT DO IT!

Guest

That's 48.5 Instagrams.

realitysconcierge

Yo, it seems to me like there are a bunch of high profile mergers happening this year

Heimrikr

Consolidation of communications and information in order to achieve consolidation of power.....